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Key Takeaways
- C.H. Robinson shares traded sharply lower Thursday morning after the logistics giant fell short of analysts’ fourth-quarter earnings and sales estimates.
- The company’s top line came under pressure from waning freight volumes and excess capacity, which suppressed transportation rates.
- The C.H. Robinson share price may find chart support from the November swing low around $80.
C.H. Robinson Worldwide, Inc.
Source: TradingView.com.
Shares in logistics giant C.H. Robinson Worldwide (CHRW) fell sharply in early trading Thursday as slumping freight demand weighed on the company’s quarterly results. The company reported fourth-quarter adjusted earnings of 50 cents per share, considerably less than the 81 cents per share analysts had expected. Revenue also disappointed, coming in at $4.2 billion, contracting 17% from the December 2022 quarter and falling short of the consensus estimate pegged at $4.34 billion.
The top line came under pressure during the period from waning freight volumes and excess capacity, both of which suppressed transportation rates. “Our fourth-quarter results did not meet our expectations as we continue to battle through a poor demand and pricing environment,” C.H. Robinson’s CEO Dave Bozeman said. “Weak freight demand in an elongated market trough, combined with excess carrier capacity, continued to result in a very competitive market,” he added.
By segment, the company’s North American Surface Transportation division, which accounts for over half of total revenue, posted an adjusted gross profit of $380.2 million in the quarter, down 24.3% year-over-year (YOY). The freight giant’s Global Forwarding unit saw adjusted gross profit slide 14% from the prior year to $162,322. Furthermore, revenue in each segment declined 16- and 30%, respectively, from the corresponding year’s quarter.
The CHRW share price broke down from an 11-month trading range in early September before bottoming out just below $80. A recent countertrend rally came to an abrupt end on Wednesday, with the stock closing convincingly below the 50-day moving average on higher than average share turnover. If the price succumbs to further earnings-driven weakness, monitor the November swing low as a potential area of chart support.
D.H. Robinson shares were down 8.7% at $76.76 about 5 minutes after the opening bell Thursday. The stock has lost about a quarter of its value over the past year.
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